Reference no: EM133659322

Question

1. Jerry enters into a contract to sell his house, 500 Jones Street, to Cam. But Cam sees another property, 123 Main Street, that is also owned by Jerry. The parties agree to change the subject real estate of the contract and sign the appropriate documents. What is this called...?

Contingency.

Specific performance.

Partial performance.

Novation.

2. What is the name of the process when a contract is canceled by both parties?

Full Performance.

Attornment.

Termination by mutual agreement.

Novation.

3. How is the property identified in the contract?

By photograph.

By reference to the neighboring properties.

Using a legal description.

It's not. The parties agree orally about the property.

4. Sam is selling his real estate. He puts in the contract that there are no liens or claims against the property. What is this called?

A warranty.

A contingency.

An amendment.

An addendum.

5. What is contained in a letter of intent?

The broker's commission, stated as a percentage of the sales price.

Every single term of the real estate contract.

The basic terms of the real estate contract.

The liens that must be paid off before the closing.

6. What is an amendment?

Additional information added on to the end of the contract.

A corporate seller.

A promise to pay the purchase price early.

A document that changes a term of the contract.

7. What is proration?

Promises made by the seller about the condition of the property.

Buyer's promise to pay the purchase price.

When part of an expense related to the property is divided by the buyer and seller based on the closing date.

Another word for the legal description of the property.

8. Bret is the buyer on a real estate contract. He's obligated to pay $100,000 to buy a new home. However, for other reasons, Bret goes into bankruptcy. What will likely happen to the contract?

The trustee will buy the property then resell it for a profit.

The trustee will terminate the contract by operation of law.

Bret will buy the property but at a reduced price.

Bret will be forced to complete the contract.

9. What is the most likely contributing factor to the length of the average real estate purchase agreement?

The paper printing lobby.

Every real estate contract must have10 parties or more.

Law requires that the print be in a very large font.

Numerous lawsuits over the years about each issue.

10. Jim is selling his real estate to Wayne. The contract allows Wayne to have a 30 day inspection period to include a physical inspection of the real estate. Jim will not let Wayne go onto the real estate, but demands that Wayne complete the closing and pay anyway. Wayne files a lawsuit against Jim. What is the most likely result?

The court will cancel the contract by operation of law.

Wayne and Jim will fight it out in a boxing match.

Jim will prevail, it's his property.

Wayne will be awarded monetary damages equal to the value of the real estate.

11. Amy is representing the buyer as a real estate agent. What type of warranties will she want in the contract for the benefit of her client?

As few warranties as possible.

It doesn't matter. Warranties are irrelevant to the buyer.

Warranties that guarantee as much about the good condition of the property and title as possible.

Only a warranty that the owner is the owner. All others are unimportant.

12. What is required to obtain liquidated damages?

There must be damages of at least $100,000.

Liquidated damages are never permitted in a contract dispute.

A liquidated damages clause in the contract.

There must be physical injury to a person.

13. Eddie and Sue enter into a real estate contract. But because of an unlimited inspection period, the transaction does not close for five years. Sue files suit against Eddie to complete the transaction. But the state has a law that says contracts are enforceable for only 4 years. What is the result?

The contract is terminated by operation of law, statute of limitations.

Eddie will prevail.

Sue will prevail.

The real estate will be sold and the proceeds divided among the parties.

14. How is the amount of earnest money set?

The closing attorney decides.

By negotiation of the parties.

It is $5,000 in every transaction.

It is set by state law.

15. Bill is selling his real estate to Sam. Bill receives a higher offer, and Sam finds a more suitable property. What can they do about the contract?

The buyer pays a percentage of the purchase price to the seller as compensation.

Mutual termination by agreement.

The seller pays the buyer a percentage of the increased purchase price.

They are bound to the contract and must perform it no matter what.

16. According to the ............, all real estate sales contracts must be in writing.

Statute of Limitations

All of the answer choices provided are correct.

Federal Fair Housing Laws.

Statute of Frauds

17. What usually comes first in the real estate contract negotiation process?

The buyer makes an offer to the seller.

The real estate agent sets the price based on their market research.

The seller sends out prospective offers to buyers.

The buyer must pay the listing price of the property.

18. What must be given in exchange for a contract being signed?

Something of value.

Nothing, one side signing is enough.

A firm handshake.

At least $10,000 in goods.

19. What is usually included with the purchase price in the real estate contract?

The name of the seller's bank.

The amount of money the property sold for at the last transaction.

The acreage of the property.

The payment terms, whether cash or mortgage.

20. Which of these is required for a valid contract?

At least $100,000.

Meeting of the minds.

An elaborate public signing ceremony.

A third party witness.

21. What do we call performance that is not full performance?

Impossibility of performance.

Specific performance.

Partial performance.

A real estate contract.

22. If a bankruptcy is discharged, what happens to payment obligations under a contract?

The payment obligation continues.

Payment obligations are canceled.

The payment obligation is eliminated if it is more than $100,000.

The payment obligation is reduced by 50%.

23. If there has been full performance of a real estate contract, what is the end result?

The seller sues the buyer.

The buyer sues the seller.

The seller sues the buyer. The parties go their separate ways in the same position they started.

The seller will have the purchase price and the buyer will have title to the real estate.

24. What is the Statute of Frauds?

A State law that says real estate contracts must be in writing.

A survey of the property.

A required seller's disclosure.

A federal law allowing contracts for real estate to be oral.

25. What is novation?

A breach of contract by the buyer

A breach of contract by the real estate agent.

When a contract is replaced with another between the parties or the contract is materially changed.

A mutual cancellation of a contract.

26. Can a buyer and a seller prepare their own real estate contract?

No, there must be a licensee.

Yes, and the parties should never involve a professional to help.

Yes, but it is not advisable.

No, there must be an attorney.

27. If a party goes into bankruptcy after a contract is signed but not fully performed, what is likely to happen?

The bankruptcy trustee cancels the contract by operation of law.

The trustee will sell the property for a profit.

The trustee will force the contract to go forward.

The property will be purchased and the value distributed to other credits.

28. What are the public policy grounds for making specific performance a rare remedy?

Specific performance is only available when the transaction is for $1 million or more.

Sellers should always have the advantage.

Courts generally do not have the power to issue orders.

Courts do not want to force people into transactions that they do not want to join in, if there is a monetary remedy available.

29. Under termination, what happens to the earnest money?

The earnest money is divided among the parties.

The earnest money escheats to the state.

The earnest money goes back to the buyer.

The earnest money goes to the closing attorney.

30. What is specific performance?

Completing all terms of the contract.

Failing to perform one condition of the contract.

An order from the court to complete a term of the contract.

When a contract is fully executed.

31. What is a counteroffer?

Another name for the seller.

The purchase price.

When the seller does not agree with the buyer's offer and makes an offer of their own.

The market price.

32. What are warranties in a real estate contract?

Another name for the parties.

The purchase price and mortgage terms.

Promises made by the seller about the condition of the property and its title.

A change in the terms of the contract.

33. When do damages usually occur in a real estate closing?

After the closing is completed.

Before the real estate contract is signed.

Real estate contracts are never breached.

When the real estate contract is breached.

34. Why is the contract date significant?

It gives a reference for deadlines.

It determines the amount of earnest money in the transaction.

It's not and almost never appears in a contract.

It determines the type of contract to use.

35. Bill and Stan make an agreement for Bill to buy Stan's real estate. They shake hands on the deal. Is this a valid contract?

No, a real estate contract must be in writing.

Yes, they agreed on the price.

It depends on the ruling of a court.

Yes, they shook hands.

36. Sara is selling her real estate. She signs one real estate contract with Bill dated May 1 for $350,000, and one real estate contract with Brad dated May 2 for $400,000. Which contract will be enforced?

Both are invalid.

Whichever contract is for more money.

Bill, May 1, because it was signed first.

Both are valid, and the two buyers will have to negotiate.

37. Marcus is a real estate agent who represents the seller in a transaction. If Marcus provides legal advice to the seller, he may be guilty of...?

All of the answer choices provided are correct.

Blockbusting.

Testing.

The unauthorized practice of law.

38. Real estate is being sold, and the parties agree that some of the personal property will remain in the premises, but some of it will not. What is the best way to handle this situation?

After the closing they can discuss it.

An addendum listing the personal property.

Let the closing attorney decide at closing.

All the personal property should be sold and the proceed divided by the parties.

39. A seller is selling his real estate to a buyer. The purchase price is $200,000. The buyer gives the seller $100,000 with the promise to give the rest to the seller the next day. The seller gives the buyer the deed. However, the buyer never makes the second payment. What remedy is available to the seller?

Specific performance, getting an order from the court, forcing the buyer to pay the rest of the money.

The seller gets the property back and can keep the money.

The seller has to give back the first $100,000 but the buyer keeps the property.

The property is resold and the proceeds are split among the parties.

40. Can an oral mortgage contract be enforced?

Yes, all oral contracts are valid.

Yes, as long as the lending bank is federally chartered.

No, it must be in writing.

Yes, because it is for more than $500.